Dumped NZ First MP Brendan Horan is digging his heels in and refusing to leave Parliament.

NZ First leader Winston Peters today expelled Horan from the party after receiving "substantive material" that caused him to lose confidence in the Tauranga-based list MP.

Horan has released a statement through his lawyer denying any wrongdoing amid allegations over his late mother’s finances.

Paul Mabey QC said the MP’s expulsion had come without notice and he had no intention of leaving Parliament.

"He has no reason to do so. Mr Horan is the subject of unproven allegations which he completely denies. None of the allegations have ever been put to him directly nor has he shown any evidence to support them."

Horan denied that he had in any way misused his mother’s money and he was confident that any investigation would exonerate him completely, the lawyer said.

Peters told Parliament: "Substantive information has come into my possession, some as recently as 2.15 this afternoon."

"The information we have received leaves me in a position where I have no confidence in Horan's ability to continue as a Member of Parliament and he will be expelled from the NZ First caucus forthwith."

Peters said Horan had a duty to resign as a Member of Parliament.

"This is a bitterly regrettable situation but we had to place our decision on the public record as soon as we were in a position to make it. The nature of this inquiry means I am unable to make any further comment outside Parliament.

"The allegations were of a nature that they should be treated seriously."

Peters said he was required to conduct a full inquiry into the matters relating to Horan - first raised by the Sunday Star-Times last month - and he wanted to report the results of that to the House.

It was "one of the quirks of the system" that he could expel Horan from the party but not from Parliament. He said that was perhaps as it should be, Peters said.

"Otherwise people could be expelled for improper reasons, for reasons that are purely vindictive or ideologically because they are different."

He was confident of the processes in place now.

He would not discuss information provided to him and said it was supplied "by a number of people".

The statement had been under Parliamentary privilege for very good reasons, he said.

"I am not going to be subject to people spraying defamation writs. It costs you a fortune no matter how correct you might be or not.

"That is used to muzzle people and i did not wish to expose myself to that."

Asked if he has made himself a judge, he said: "Yes I have. Because that's the position I'm in and I've got to take it deadly seriously as you all did in the last few weeks."

He said the caucus would meet later this afternoon. He had told Horan of his decision, but he would not reveal the contents of the discussion.

Horan would be expelled from the party too. ''That will be automatic."

"You bust your gut, you make some serious sacrifices...and it's always a bitterly disappointing moment, but we have a responsibility to the public of this country and to Parliament and to the party itself"

He was not concerned about damage to party. "My party will be relieved that we have done our duty"